Do These Goals Seem Reasonable? (and other questions)

Do These Goals Seem Reasonable? (and other questions)

Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes

Brace yourselves. This one's a doozy. Skip to the line if you're in a hurry.

I joined this site quite a while ago. Then, I forgot about it.  

I just focused on other things, almost all of them crazy ideas and flights of fancy that led me right back to here.  It got a bit out of hand, and I'll run you through a few of them if any of you are curious.

Anyway, I've had some time to think and grow up a bit in the passing of a year. I still want to improve my cash flow to the point where I can retire, but I'm now under no illusions that it will be a quick or easy process. 

As far as I can tell, real estate investment seems to be the best way to go for me. I get a lot of free time because of my work (it's not a horrible job, mind you).  My finances aren't that bad. I've certainly seen worse.  And, most of all, I think I can do it.

But I'm a total newbie.  Since I'm going to be spending some quality time with you guys on this site, I thought I might run the ins and outs of my circumstances and goals by you guys. Maybe you guys can take a look and possibly throw out a few ideas.

I can't offer my own real estate thoughts in exchange, by the way. I'm a good cook, though, so if you want food advice, I can help out there. 

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Anyway, here's the rundown.

1. I currently own a home, though I'm in the process of selling. Monthly payment on mortgage is around $950 and I have $127,000 on the mortgage. I bought it right before the recession in '06, and have long since regretted the decision.

2. After the house sells, my girlfriend are going to rent until we get married, which will happen within the next two years. I talked to her about buying a multi-family and living in one of the units, and she likes the idea.

3. In fact, this is pretty much the first idea that I've had in a while that she's been fully on board with. That's not a complaint, by the way, as all of the ideas that she expressed concern with were terrible ideas. I'm thankful to have her as she's become a sort of canary for my various schemes.

4.  Long term goal:  Increase my cash flow so that I can retire and focus on real estate full time. While simultaneously cutting back on my expenses as much as possible, I'm going to increase my cash flow. Currently, I get about $2,500 a month from my job, and that takes care of my expenses and leaves me about $700 or so surplus once you factor in cash flow from my other assets. So, I need about $1,800 more, right?

5. I want to build this cash flow by buying multi-family properties. From what reading I've done on this site, that seems to be the most effective approach. Besides, I'm not sure that I'm a good enough marketer or salesman to try my hand at the others. 

6.  I am terrified of getting scammed in this process. There. I've said it. In fact, it's that specific fear that helped keep me away from this site. Not that I don't trust you, but, well, I don't really trust anyone at all when money is involved. We didn't have a lot growing up (single parent household), and I think that had a lot to do with making me this way. 

7. Here's my skillset:
-I have zero practical experience with sales, marketing, or business negotiations. I'm kind of an introvert, actually.
-I know how to do basic repairs--hammer and nail sort of stuff--and am generally a quick study when it comes to the stuff that I don't know. I plan to devote a sizable chunk of my summer to learning more handyman skills that I can leverage in buying a home (This Old House was one of my favorite shows growing up).
-I love research. It's weird.
-I'm a voracious reader.
-I seem to have a knack for putting together a basic budget on a spreadsheet. At the very least, my girlfriend seems impressed by it.
-I can do web design and a little bit of coding.
-I'm a good cook. That skill might not be useful in buying a house, but I'm sure I can leverage it one way or another. We all gotta eat, right?

So that's about it. Sorry it was so long. I just wanted to make sure that my head's on straight before I dive in to this thing. 

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Investor · New Braunfels, TX · Member since 2015 · 139 posts · 26 votes
11y

My friend, welcome back :) Your skills will not be nearly as important as your ability to overcome fear. This ability and not skills will determine if you or any of us have what it takes to make this a reality. So fixate on that first and the skills will fall into place.( Don't forget that FHA has extended PMI for the life of the loan. Not that that's a deal breaker, just a fyi. Remember multi fam changes at 5+, appraising and lending are different. But a nice du, tri, or 4 might be something your looking for) Have a wonderful night :)

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  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Jack Tucker

    I'd love to send you a message. Trouble is that I can't seem to find the message button on this site. Help!

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Edward Shin

    Call me out, and I'll play ball. ;)

    Anyway, this isn't a recipe as much as it is a technique. Since learning REI has the potential to dramatically change my circumstances, I think that it's only fitting that I pass on to you guys a cooking technique that similarly upended my culinary world:

    Brining.

    I daresay that soaking meat in a brine before cooking it is probably one of the most important things that I've learned in cooking. There's some sort of chemistry involved, but the quick version is that it makes your meat much juicier and more flavorful than not brining.

    This link right here takes you to a pretty good catch-all brine:  http://www.food.com/recipe/basic-brine-for-juicy-t...

    It's basically just water, some salt, and some sugar. You can add other seasonings to the water, too, depending on the flavors that you want, but it's not necessary. You'll notice a huge difference just with water, salt, and sugar.

    Anyway, you immerse the meat that you're about to cook in the brine water for a period of time. If you've got small cuts of meat like pork chops or leg quarters, then about 3-5 hours should do it. I'd do whole hens or turkeys for anywhere between 12-24 hours. You kind of have to experiment with the timing, and even I haven't gotten it right yet. Leave your meat in too long and it becomes salty, so you'll want to err on the side of too little time as opposed to too much.

    Aside from the Thanksgiving Turkey, the other two things that I think lend well to brining are fried chicken and pork chops. They're both easy to work with, and they're both ordinary enough to give people that wow factor when they bite into them after they've been brined (and cooked of course).

    And the nice thing about pork chops is that they're the perfect single guy (or gal) food. Soak them for a couple of hours in the brine, give a light dusting of paprika and garlic powder, and then plop them into a skillet on medium-high-ish for about four or five minutes per side (give or take).

  • New York City, NY · Member since 2013 · 136 posts · 76 votes
    11y

    @Travis H.

    You're afraid of getting scammed because you don't have enough knowledge of the field. People often give very broad advice, so I'm going to get very specific on the exact action steps that I would take if I were in your shoes.

    I would recommend that you listen to all 115 podcasts from start to finish. At 2x speed, this will take you about 60 hours, or over 2 full days. These podcasts will fill in a LOT of gaps and give you a great foundation to start building on. In the meantime, spend 30 minutes a day browsing the forums -- take note of anything you don't understand for further research. Do the research once you find a blind spot.

    Next, reach out to 5-6 agents in the area and explain to them what you're trying to do - you would like to start investing in properties in the area. Pick one or two that you like. There are plenty of articles on screening real estate agents, so read them before you reach out. Have the agent put you on an automated MLS email for multi-family properties. I don't recommend you limit yourself to just multis at this stage, because it's very possible singles have better numbers in your area. You may also want to do HUDs and REOs, and possibly just single families between certain price ranges in your 'farm area'.

    Now, start going to open houses and showings so you can get an idea for what is in your area. Use rentometer, hotpads, padmapper and craigslist to pull rent comps on every house you see so that you can get an idea of prevailing rents. Now, run the numbers on these properties. Will they cashflow? You should get to the point where you can run the quick and dirty numbers on a property in 15-20 seconds without a pen and paper. Now you're ready to pull the trigger on your first investment.

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Riley F.

    You, sir, are a godsend.

    As it turns out, I've got a lot of free time on my hands because of my broken leg. I've pretty much had nothing better to do these last few weeks but sit around and read, listen to podcasts, and play Skyrim. I have a mage character on there that went from zero to badass in three days.

    I've got an agent that I'm working with to sell my house. It's a husband and wife team, and I like them a lot, so I might start with them.  

    I'll start listening to those podcasts as soon as I can, and I'm definitely making a note of those comp sites.

  • Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    11y

    @Travis H.After 15 years in this business I don't think you need to lose much sleep about someone taking advantage of you. Very few people even know enough about real estate to attempt to pull something and that includes realtors, bankers and lawyers. Other people could cost you money but it's more likely due to incompetence rather than malicious intent.

    That said, there's certainly nothing at all wrong with being careful, dotting your I's and crossing your T's so to speak. You need to do you own due diligence to make sure a particular property is worth buying anyway.

    The good news is that real estate isn't (at least I doesn't have to be) a face-paced high-pressure environment. You usually have plenty of time to check things out, and you have the ultimate power, if you're not 100% sure about a deal then just don't do it. Don't worry about losing out because there's always another deal right around the corner.

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Doug P.

    I blame a lot of my nerves on just growing up in Georgia during the 80's and 90's. I was a kid when they had that string of child murders back in the 80's, and I think that made my parents more paranoid than most other parents. This was during the time where people were afraid of things like folks hiding razor blades in Halloween candy and sneaking poison into over the counter medicines. We lived our entire lives in a rural setting, and my parents were naturally nervous about anything that seemed unfamiliar. Heck, it wasn't until I went to college that I even drove on the interstate for the first time.

    So a lot of my nervousness is just living a fairly sheltered life.

    It gives me comfort knowing that I can battle most of those dangers with knowledge, though.

  • Saint Paul, MN · Member since 2015 · 1 post · 0 votes
    11y

    Travis,   Sure, there are plenty of "used car salesmen" out there that are trying to talk you into something just so they can get their commission but the good ones really want to help you find what you need.  I'm probably as distrustful as you are so when I'm shopping for something, I do as much research as I can.  If I know what I'm looking for, it's a breeze spotting a phony.  Remember that knowledge is power!

  • Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
    11y
    Originally posted by @Travis H.:

    @Ross Ellington

    ...It doesn't really help that I naturally distrust anyone and everyone who is selling something. Any pointers on getting around that? More specifically, do you have any thoughts on how to handle the sort of cognitive dissonance that I know I'm going to experience when I start pursuing real estate deals? (IE I hate people selling me things, but I'm going to have to be a salesman of sorts myself if I hope to be successful.)

     In a free market transactions are assumed to be "mutually beneficial" ignore the benefit to the seller for the moment. He may be getting rid of a house that he has his unpleasant Mother in law living next door to him and will sell for a loss. Or he may be making a killing even if he sells it for less than market value.

    NO ONE but YOU can determine the benefit to you.

     This site is good at helping you determine if the future financial benefit will be what you hope.

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Kim Moon

    @Richard Dunlop

    Thanks, folks. That makes me feel a lot better. And the example of a mother in law puts things in perspective.

    You know, I'm a veteran of the online dating world (if such a thing exists). I noticed that some of my same concerns that I've voiced about real estate investing are similar to the ones that I've heard when people ask me about online dating and whether it's safe. 

    And there's scammers there, too, but I figured out that they were fairly easy to spot once you know what to look for. Incidentally, I've had enormous success with it, and am now in a committed relationship with a wonderful woman because of it.

  • Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
    11y

    It sounds to me that you have a distrust in business in general. Feel that people really getting taken advantage of and the like. I would recommend the book " Though shall prosper" by RABBI Daniel Lappen. It really highlight the need for and benefits of business. I think it will allow you to view business and sales in a different light. Your analytical mind will take care the rest. Outside of that don't be afraid to say you need some time to make a decision and utilize our research skills and come up with a path forward. Do not over think it and delay action but take your time to make wise decisions.. good luck and welcome.

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Kyle Hipp

    Just bought the book. I'm not a religious person at all. In fact, me and the church have a pretty nasty history, to put it lightly, but I'll take my info where I can get it. Thanks for the info!

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Kyle Hipp

    Just wanted to mention that I've started reading that book you recommended. I love it! I'm even planning on pilfering an excerpt from it to teach my students about audience and rhetoric when I get back to work in a week.

    Thanks!

  • Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
    11y

    I thought you might like it. I am a Christian, not a church at tender as much as I would like, and it sure seems to me that all religions have been taking a beating lately. It seems many people who haven't studied the Bible feel it is a big rule book for the reason of "because I said so"  when by and large it is because it is for your benefit. E.i. killing someone not only affects that person murdered but also the killer, must be a horrible burden to bear. Anyway, glad you are liking the book. I just might have to read it again soon.

  • Investor · Social Circle, GA · Member since 2013 · 60 posts · 10 votes
    11y

    @Kyle Hipp

    I was raised Southern Baptist, though my nuclear family wasn't all that devout. I just about typed up a long diatribe about my experiences in the loss of my faith, but decided against it as I'd rather not derail my own thread. If you're curious, PM me and I'll tell you the story.

    I will say, having seen both sides (Christian and not-Christian), I don't think it's as much that people feel that the Bible is a big rule book. I thought the same thing myself, but my observations since I left the faith simply do not support that. Most of my friends, the more literate ones at least, don't see the Bible as a big rule book. Mostly, they see it as a work of literature, history, poetry, etc. They're also very willing to acknowledge its role in our national culture. At the very least, they understand that many (if not most) of the principles expressed in the Bible are sound. 

    And several of them have read the Bible cover to cover. They just don't give it any more credence than they would the Magna Carta or the Q'uran or the Bhagavad Ghita.

    I will say that, if anything, a lot of their attitudes towards Christianity comes from having observed Christians and people of other faiths. Some people (not just Christians) get pretty defensive when they perceive that their beliefs are under attack. My girlfriend, an atheist, actually managed to offend one of her coworkers simply by saying that she didn't want kids. Even I'm a little nervous typing this as I want to be as respectful towards your faith as I possibly can. 

    One person, of course, isn't a representative sample of anything, but once you factor in stuff like negativity bias, depictions of people of faith in the media, a few other chance run-ins with nutjobs, and the fact that it's far FAR too convenient to ignore all of the beneficial things that Christians (and those of other faiths) do for the world at large, and it's fairly easy to see why faith is something that gets attacked so much. I do agree with you that most beliefs, and especially Christianity, get a pretty raw deal in the public eye.

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